E-tailers Flipkart, Snapdeal may soon need an alternative to discounts

According to a recent RAI-PwC report, the discounting strategy of ecommerce firms will not work for long.

According to a recent RAI-PwC report, the discounting strategy of ecommerce firms will not work for long.

According to a recent RAI-PwC report, ecommerce is going through a disruption. Firms are trying to differentiate to get higher gross merchandise sales. The report also discusses the next phase of evolution, where online and offline firms will have to work together. It also mentions that the success of online has spurred growth of small businesses across the country, citing examples of saree weavers in Varanasi, and handcrafts and curio makers, who have got an opportunity to cater to a bigger customer base.

The report mentions that the discounting strategy of online firms will not work for long. Cumulative losses at firms due to discounting have gone up to Rs 1,000 crore. However, the good news is that the rising sales of smartphones has fueled growth of mobile Internet and helped online companies, as ecommerce has grown in tier-2 and tier-3 towns.